Based on Brazilian trader André Moraes’ Difusor de Fluxo theory, the indicator is a more reliable version of the original MACD. It is a great confirmation indicator for Swing Trading and also can be used as a Day Trading tool.
If you are not familiar with the concept or André’s trading strategies, I strongly recommend his excelent book named “Se Afastando da Manada” in which he explains in detail how this indicator is used. Even if you don’t know the Portuguese language it is not difficult to understand the concept since it is based on the MACD indicator with an additional filter applied. This indicator is used as a confirmation tool for a Trend in place.
For easy reading, when the 3 moving averages are aligned in the correct position (Short, Medium and Long term, or vice-versa in a downtrend) the indicator will turn the colors of the lines bright and colorful. When the 3 moving averages are misaligned (i.e. Short term line in the middle of Medium and Long term lines) the indicator will tone down their colors. This way you can apply this indicator in a chart to scan through several possible symbols and rapidly check if there is a trend or not.
The values initially set on the indicator are based on the Phi Cube theory and can be changed and recalibrated to the Symbol you want to trade easily…
SETTINGS
- Short Term MA periods – Calculation of the MACD (Slow and Fast EMAs)
- Medium Term MA period of the Short Term MA
- Long Term MA period of the Short Term MA
- Applied Price for the Short Term MAs
- Colors for ALIGNED and NOT ALIGNED MAs
